According to FINRA, Eugene Hyunwook Kim was named in a complaint alleging that he engaged in unethical conduct, acted in bad faith, and misused customer funds in connection with a private placement offering sold by his member firm.

The complaint alleges that Kim proposed to his firm's commitment committee that the firm initiate a private placement offering through a firm-affiliated fund for shares in a private company at a maximum price-per-share of $9.75. At the time Kim submitted the offering for approval, he had not confirmed a source of shares for the offering at any price. The firm approved the offering, and sales representatives solicited investors who invested a total of $4.055 million.

Prior to closing on escrow, Kim allegedly did not source shares for the offering at any price. However, instead of refunding investors, Kim allegedly initiated the closing of escrow and received a $16,220 commission. During the following months, Kim allegedly actively misled firm principals, representatives, and customers into believing that the fund had purchased shares at the maximum share price.

Ten months after the offering's closing, Kim allegedly purchased a limited number of shares at an average price of $20.22. Even then, over $1 million in investor capital allegedly remained in cash, as Kim was unable to find enough shares to purchase with the customers' investments. Ultimately, Kim's firm allegedly uncovered his misconduct and notified investors that they had not purchased shares at the maximum share price, but instead owned shares at a higher price and some of their funds had not been used to purchase shares at all.

This is an unadjudicated complaint, and Kim has not been found guilty of these allegations. However, the allegations, if true, would represent serious misconduct involving misuse of customer funds and fraudulent misrepresentations. Investors should be cautious about private placement offerings and ensure they understand exactly what they are purchasing and at what price.